In a recent analysis, BTIG has adjusted its price target for Borr Drilling (BORR, Financial), reducing it from $6 to $4, while maintaining a Buy rating on the stock. This update is included in a comprehensive report on the energy sector. Despite a rise in offshore drilling activities in April, the firm notes a decrease in floater activity, with one less rig compared to the previous year. The upcoming months are expected to present more challenging conditions. Analysts at BTIG predict that offshore drilling operations will face continued slow progress over the next year, accompanied by declining pricing trends.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Borr Drilling Ltd (BORR, Financial) is $4.35 with a high estimate of $6.00 and a low estimate of $3.00. The average target implies an upside of 152.91% from the current price of $1.72. More detailed estimate data can be found on the Borr Drilling Ltd (BORR) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Borr Drilling Ltd's (BORR, Financial) average brokerage recommendation is currently 1.4, indicating "Buy" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Borr Drilling Ltd (BORR, Financial) in one year is $8.69, suggesting a upside of 405.23% from the current price of $1.72. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Borr Drilling Ltd (BORR) Summary page.
BORR Key Business Developments
Release Date: February 20, 2025
- Operating Revenue Increase: $21.5 million increase over Q3, driven by higher day rates.
- Adjusted EBITDA: $136.7 million for Q4, within the full-year guidance range of $500 million to $550 million.
- Technical Utilization Rate: 98.9%.
- Economic Utilization Rate: 97.1%.
- Average Day Rate for 2025: $149,000 compared to $136,000 in 2024.
- Net Income: $26.3 million for Q4, an increase of $16.6 million.
- Earnings Per Share: $0.11.
- Free Cash Position: $61.6 million at the end of Q4.
- Total Available Liquidity: $211.6 million.
- Cash Distribution: $0.02 per share for Q4 2024.
- Backlog Secured in 2024: $795 million at an average rate of $177,000 per day.
- Capital Expenditures for 2025: Expected to be below $50 million.
- Mobilization Payments Expected: $44 million upon contract commencements in 2025.
- Mexican Payment Arrangement: $125 million, with $105 million collected so far.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Operating revenue increased by $21.5 million over Q3, driven by higher day rates.
- Technical utilization rate was strong at 98.9%, with an economic utilization rate of 97.1%.
- Successfully completed a new build program, marking the end of growth capital expenditures.
- Secured $795 million in backlog at an average rate of $177,000 per day, considered market-leading.
- Liquidity positively impacted by a $125 million payment arrangement with a major Mexican customer.
Negative Points
- Softening demand and declining day rates in the second half of 2024 signal potential headwinds for 2025.
- Suspensions of rigs in Saudi Arabia and Mexico negatively impacted operations.
- First quarter of 2025 expected to be negatively impacted by suspensions and idle time.
- Total financial expenses increased by $5.7 million due to interest on additional bonds issued.
- Cash decreased by $124.1 million compared to the prior quarter, largely due to investing activities.
